Increases in Labor Hours Because of ISO 9001

K

Karen

#1
My CFO wants to know if we should expect labor hours to produce a product to go up as a result of ISO Compliance and if there is a rull of thumb on increased time that manufacturers experience? I think we will be able to measure improvements, but would like to provide him with some support data. Any suggestions as to where I may find this type of information?
 
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Marc

Hunkered Down for the Duration
Staff member
Admin
#2
Typically if your implementation is 'done well', your labour hours should not increase and could in fact decrease.

However, that said, in some cases it could increase costs overall. For example, if you never recorded and tracked nonconformances before and you implement ISO you have a new resource requirement because you now have to have someone monitor and administer the system. Another more common 'additional cost of doing business' is Internal audits. Whether you contract them out (a direct $ expense) or try to do them in-house (a $ expense for training and then you have to add the person hours for the audits themselves), you will have an expense you did not have before your implementation.

I don't know of a rule of thumb (maybe one of the others knows of one).

Most companies do report decreases in manufacturing costs in large part due to better defined and understood systems (less wasted time), better communication internally, fewer nonconforming product incidents, etc., etc. I have seen various figures up to 20% to 30% savings (I cannot cite specific resource for these figures off-hand) within a year or two.

For data I can only recommend the ASQC's web site. Maybe the other folks here can help with specific citations.

QS9000 is a different story all together.
 

Marc

Hunkered Down for the Duration
Staff member
Admin
#4
I should point out that typically during the implementation process there is an increase in labour hours as folks map processes and in general 'do their part' in the implementation process. There are a lot of variables in this. But not as a result of ISO compliance except as I stated above.
 
A

Andy Bassett

#5
Karen

I would echo Marks thoughts and go as far as to emphasise them. Its probably as well to prepare your CFO on a number of grounds.
1 Labour hours will initially increase as in simple terms things will have to be done that were not done before. (Calibrating Test Equipment, Recording defects etc)
2 In the short term, when procedures are new it appears as though it is more complex and longer to get everthing done.
For example - If engineers were quite happily bypassing Purchase before, in future they should (heavens forbid) try to work with Purhcase by stating clearly their requirements (ie on a Parts Requisition).
3 In the short term expect an internal company pissing competition, with lots of noise directed at you or whatever programme you are implementing.

Implementing clear processes is a little bit like draining a lake. The water represents all the vague unclear systems you had before (otherwise defined as flexibility by organisation s**t surfers). The rocks that you start to see when the water drains is your real problems, and unfortunately it is now crystal clear where these problems lie. Probably at the start it was not clear in your company that Project Management is lousy, but when you go looking for Project plans and design reviews you will start to see that the dept is not up to the job. And how these boys will squeal.

Hope im not putting you of.

------------------
Andy B
 
K

KAREN

#6
AS USUAL YOUR RESPONSES ARE GREAT... I LOVE TO BE ABLE TO SEE THE HUMOR IN AN OTHERWISE DRY TOPIC. THANKS GUYS!
 
L

Laura M

#7
Funny thing about CFO's...internally they want to know how much its costing them...but wait 'til they find an example to show where it saved them $$ - preventing a quality issue, or streamlinig as a result of implementing defined processes. You'd think implementing it was their idea!
 
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